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The latest news is that Proview, owner of the iPad
trademark in China, might file an application with China Customs.
This wrinkle was reported on Sina (Chinese) (h/t Bill Bishop/DigiCha).

According to the Sina report, which includes statements from the
Proview legal team, there are now roughly 20 actions in nine
provinces pending around the country. I believe these include
both administrative actions (AIC) and judicial actions (civil
suits for trademark infringement, which may involve preliminary
injunction orders).

As I’ve said before, the AIC and court actions could involve
raids on resellers or other retailers, fines, seizures of
product, formal determinations of infringement, and orders for a
public apology. So far, it sounds like the AIC in some cities
have merely requested that resellers take iPads off the shelves
until the dispute is resolved. Things
could be a lot worse for Apple if
this goes to the next level and officials get more aggressive.
I’m also assuming that these actions are local and that there is
no national coordination — politically, this could happen, but I
haven’t seen any evidence of this so far.

Speaking of which, an action with the General Administration of
Customs could be significant for Proview, and the Sina article
suggests this might be in the works [this has been confirmed
since I originally wrote this post]. This is a relatively
simple procedure whereby an IP owner, in this case trademark
owner Proview, files their trademark certificate with GAC, which
is then “on notice” regarding Proview’s ownership rights.

Even before such a filing, GAC has the authority to stop any
import/export of goods suspected of infringing intellectual
property. Note that although this includes exports, Apple’s
ownership of the mark in most other jurisdictions probably
minimizes the danger on that end. This would be a true nuclear
option if we were dealing with a patent infringement.

But that’s not how Customs usually operates, which is why I
haven’t mentioned this before. Usually, a filing is made with
Customs by the IP owner as a first step. After that, the IP owner
will determine when a shipment is scheduled, which is usually
done by an investigative firm, and then notify Customs of the
details. Assuming everything is done properly, Customs will then
seize the shipment, the IP owner will pay a bond, and the
suspected infringing products will sit there in a warehouse
pending resolution of an infringement suit.

The extent to which a Customs action would hurt Apple depends a
bit on their supply chain and where these products go once they
are assembled. I’ve mulled this over, and without knowing how
Apple operates in detail, I can’t really tell how much damage
this will do.

I’m getting way ahead of things, but I wonder whether Proview,
which is reportedly in severe financial trouble, even has the
financial wherewithal to put up the bond for a seizure. In the
old days, the amount of that bond would have been equal to the
full value of the shipment, but under current regulations, the
bond amount is only a small percentage of the declared value. I
doubt that we’ll ever find out the answer to this question, but
it’s fun to speculate (unless you work for Apple).

Unsubstantiated rumors floating around this morning on the
Intertubes speculate that Proview’s creditors might be
responsible for legal fees at this point, but I can’t confirm
that. It would explain things, though.

So the news here is that Proview may file their IP with Customs.
This would be step one, and a shot across Apple’s bow. Would they
then go after iPad shipments? That remains to be seen, but as
with the infringement suits and AIC actions, Proview also has the
law on its side when it comes to a Customs action.

You might be thinking, wow, Proview’s lawyers are really playing
hardball here. Yes and no. All of the steps they have taken thus
far, including a future Customs action if it comes to that, are
par for the course when it comes to trademark infringement. Using
courts, AIC, Customs — this happens every day here in China.
These are not extraordinary measures by any stretch of the
imagination, and I assume that Apple has anticipated all of this.